Bankruptcy halts Lighthouse Inn auction

New London - A bankruptcy court filing by a creditor late on Friday afternoon triggered an indefinite postponement of the scheduled foreclosure auction of the Lighthouse Inn.

According to New London attorney Narcy Z. Dubicki, Lighthouse Group of Connecticut filed an involuntary Chapter 11 bankruptcy in U.S. Bankruptcy Court in Hartford against McGrath Hotels LCC, the current property owners.

A bankruptcy petition stops any action against the debtor until further order of the bankruptcy court.

Dubicki, who stood outside the Lighthouse Inn Saturday morning informing potential bidders of the cancellation, said it is not known if or when the auction would be rescheduled.

Dubicki had sent out 18 packages to potential buyers of the historic inn, which has been shuttered since late last year.

McGrath Hotels bought the property - including the restaurant, inn, rooms in a carriage house, a hair salon, swimming pool and access to Guthrie Beach - in 2001 for $1.2 million, but owes New London $120,000 and the state $96,000 in back taxes.

McGrath also owes the mortgage holder, Business Loan Center LLC, more than $2 million.

Dubicki, who is the court-appointed committee of sale, told The Day last week that the inn and resutanrant are in "pretty good shape," though the Carriage House is marred by roof leaks and "torn apart" rooms.

Health officials closed the restaurant in August 2008 because of the lack of hot water, and the inn closed in September 2008 after wages were allegedly not paid to workers.

The main structure was built in 1909 as a home for steel magnate Charles Strong Guthrie and was converted to a hotel in the 1920s.